Samsung To Cut 10,000 Jobs At Its Headquarters

Things are not very well for Samsung. Although it is the largest mobile phone maker in the world, the Korean company has been losing sales quarter after quarter, mainly to Apple and other Chinese manufacturers such as Xiaomi. Their problems got really serious last year, when the launch of the Galaxy S5 didn’t get consumers excited at all and sales were disappointing, resulting in a 60% drop in profits for Q3 2014. The company then got to work and launched the Galaxy S6 with an appealing new design but things didn’t get any better: sales are still lower than expected and dropping for five consecutive months and as a result, they lost a whopping US$40 billion in market value. Samsung’s share of global smartphone shipments is also down by 3 percentage points in the second quarter and it has lost the position as the top vendor in China, which happens to be the biggest mobile-phone market in the world. These are troubled times for the Korean handset maker but they are still huge and far from being out of the game, as so, things have to be adjusted in order for the company get back on its feet.

According to reports from a Korean newspaper, Samsung Electronics Co. is preparing to laid off 10% of the workforce at its headquarters in Suwon, South Korea. As of June 30, the company had a total of 98,999 employees at its headquarters, so they layoffs will affect around 10,000 people in human resources, finance and public relations departments. “Cutting jobs is the easiest way to control costs and Samsung’s spending on mobile business could also be more tightly controlled,” said Chung Chang Won, an analyst at Nomura Holdings Inc. in Seoul, for Bloomberg. “Samsung’s preparing to tighten its belt as it isn’t likely see rapid profit growth in the years to come”. Complementing these layoffs, the company is also reportedly going to cut additional expenses in the coming year.

Since last September, Apple has been Samsung’s biggest nightmare since the launch of the bigger iPhone 6 and iPhone 6 Plus. As Apple is expected to announce this year generation of the iPhone, the Korean manufacturer rushed the release of the Galaxy Note 5 in a try to attract more customers. Yet the market didn’t ease its concerns about Samsung’s second-half earnings and the company is estimated to have a slight drop in sales, falling from 171 billion to 167 billion USD.